Strategic Alignment Between Business and Information Technology

Abstract

Information system has changed a lot of behaviour in the business, for instance in marketing
sales department in organization don’t need to suffer the road to hand out brochures. Because
sales department just need to arrange the advertising on social media that affect more impact
to power purchasing product. In other side information system has facilitated the business
operational such as cloud that provide room storage for nurturing organization’s data that
previously spend almost 16.000 US Dollars for it. This paper will discuss the alignment
strategy between business and information technology, we will provide the theory and cases
that related with this topic to grow our discussion.

1. Introduction
Information Technology (IT) alignment continues to be an important topic in information
systems (IS) research and practice because it has been shown to positively impact
performance. Alignment strategy between business and information technology become very
important discussion because almost business in 2020 while the spread of corona virus are
using the digital technology for expanding market, operational system, collecting data,
forecasting market, advertising and problem solving. moreover, we have more than this list
for the use of technology in business.
Digital transformation has change the business model in many sector, for instance in the
publishing industry they usually use digital tolls to provide the private communication and
services with their reader, they use website to sell the book that has signed with the author to
increase their prestige, also, they sell it exclusively just to their community that actively
follow the update. Digital tolls also used by designer to expose their design and sale it with
exclusively to their customer. This is the example of how the information system used, in
manufacturing corporation information technology used for many advantages. They use the
IT system to analyse and generating a bulk of data from production, salary, financial,
marketing to ease decision making.
Even when a product cannot be easily digitised (such as live concerts, fine arts), it is often
digitally extended (e.g. The Royal Opera House in London live-streams selected
performances in cinemas across the UK); and the distribution and interaction with customers
(audience) are digitally transformed. In addition to identifying and targeting new customers,
digital technologies are often used to add value to core services by extending and enhancing
user experience in existing markets. For example, a mobile app was used to supplement oil
paintings in exhibition to show the different layers of the paintings and the painting process
over time. However, changes are not evenly distributed
In this paper we will discuss detailly the corporate strategies to grow business with
information technology. This article will separated each chapter following the main topics of
System information use.
2. Literature review
Nowadays, business environment has merely aligned their IT to their business strategy.
Aligning IT to business strategy not directly change the business model but they be
process of organization to transform their strategy to the digital strategy. IT alignment
continues to be of interest to practitioners and researchers, as evidenced by a recent
special issue on alignment and its high ranking in a recent survey of practitioners.
2.1. Information technology in corporate operation
Hummel had been operating as a sports fashion B2B supplier since its
inception in 1923. Its corporate business strategy was fully focused on developing
products to sell via large sport retail chains and sport specialists. To support this
strategy, Hummel developed business resources and IT resources that enabled it to be
competitive in this particular market. The business resources included a distinctive
and well-known design, good manufacturing partnerships, as well as logistics,
finance, marketing, sales and service tuned to its B2B customers, thus ensuring
quality products are delivered at the right time. The IT resources that supported the
existing business strategy included an ERP system (Microsoft Dynamics Navision)
and an established IT department that supported the ERP system. The IT Manager
had been with Hummel for many years and was responsible for implementing the
ERP system in 1998. In 2010, Hummel’s CEO sensed the need for Hummel to
establish direct contact with the end-consumer via digital channel. However, the
company did not possess any capabilities to steer in this new direction. It would need
to reconfigure and develop resources to align with the emerging digital business
strategy. How did this process unfold? Below, we explicate Hummel’s aligning
process as it developed both its B2C digital strategy and ecommerce business and IT
resources.
 Also, in this digital era to cut operation cost for storage of the data, the leading
corporate use cloud vendor. For example in car manufacture company they have
problem with managing customer relationship because they have a plenty of users
that have contact in their website, and the higher wage always occur at the through
work time until night.

This case caused car manufacturer to have contract with cloud vendor to
handle operation of storage for website and also customer services that handle the
communication to customer of car manufacturer. From this point, even they use
cloudvendor always there are a disadvantages to use outsourcing cloud vendor.
 Another alignment act that widely used by the corporation to generate a huge
of data is Business Intelligent. Business intelligence (BI) systems are information
systems that process operational and other data to analyze past performance and to
make predictions. The patterns, relationships, and trends identified by BI systems are
called business intelligence. As information systems, BI systems have the five
standard components: hardware, software, data, procedures, and people. The software
component of a BI system is called a BI application.

some managers use BI systems for decision making. PRIDE Systems could
use BI on its competitive events to determine characteristics of events that
generate the most revenue and then conduct more of that type of event. Falcon
Security could use a BI analysis of flight failures to decide when it is time to
service drones and related camera equipment. (By the way, some authors
define BI systems as supporting decision making only, in which case they use
 the older term decision support systems as a synonym for decision-making BI
systems.

Actually, corporation use business analysis for many advantages for instance,
Amazon, Netflix, Pandora, Spotify, and other media-delivery organizations generate
billions of bytes of data on consumer media preferences. Using that data, Amazon has
begun to produce its own video and TV shows, basing plots and characters and
selecting actors on the results of its BI analysis. Netflix decided to buy House of
Cards, starring Kevin Spacey, based on its analysis of customers’ viewing patterns.
Similarly, Spotify processes data on customers’ listening habits to determine locations
where particular bands’ songs are heard most often. Using that data, it then
recommends the best cities for popular bands and other musical groups to perform in.

2.2. Information technology in marketing

In marketing Information technology was widely used for many function. The 30
mini case studies were specifically selected for their perceived novelty in adopting
new business models. At the value proposition level, 43% (13) used digital
technologies to transform their product offerings; 53% (16) transformed their market
focuses; and 60% (18) transformed their revenue models. A further 47% (14)
extended their product offering, 40% (12) extended their market focus, and 23% (7)
extended their sources of revenue. In contrast, those using digital technologies to
automate existing constructs are relatively small, with only 3 (10%) in product
offerings, 2 (7%) in market focus and 5 (17%) in revenue models. At the level of
value architecture, the pattern was similar, with many using digital technologies to
transform their value sensing (87%), creation (33%), distribution (67%) and capture
(80%). At the functional architecture level, 60% transformed their product
development; 40% transformed their production and distribution processes; and 80%
transformed their relations with customers. Most remaining firms extended the
different constructs of their value architecture and functional architecture using
digital technologies.
2.2.1. Advertising
In advertising, specially in Indonesia, commonly they used the Artificial
Intelligent that provided with Facebook ads, and also Google ads to reach their
potential market. Facebook ads is the platform that provide advertising media
that using artificial intelligent to learn customer persona of their client with
several criteria like user interest, online behaviour, until tracking audiences
interested in ads. Facebook trace the user that interested on ads by setting pixel,
and also tracking Facebook users that see the ads for some minutes.
Nowadays, in Indonesia there are many small until big business that use this
facility to offer their product. The Nissan car corporate also use this facility to
reach their customer. Also, cosmetics, book, consumer good, services. Almost
them offer their product on Facebook ads. [ CITATION Yeo17 \l 1033 ]
2.2.2. Costumer relationship
(90%) of the 30 mini case studies used digital technologies to transform their
relations with customers. A closer examination of the changing customer
relations, together with value sensing and capture, and the target segment and
revenue model revealed the increasing use of exclusivity, often through
personalisation of products and services in different firms. Digital technologies
are used to enable customers to personalise products to various degrees, and pay
different prices accordingly depending levels of exclusivity. This business model
innovation was first made popular by NineInchNails, the rock band, who
successfully sold different packages of their 36 track album – Ghosts I-IV - in
2008 using a new revenue model, from a free download of the first volume, a $5
download of all four volumes, two standard CDs for $10, to a premium package
including an exclusive vinyl record with a signed book and photograph for
US$300.
Digital technologies enabled them to efficiently identify different types of
fans (value sensing, distribution and capture), and manage the relations with
them efficiently. Many others have imitated them. For example, Jill Sobule, a
 recording artist, offers multiple options to purchase her music at different prices,
from a standard CD to a personalised live home concert. The Internet enabled
her to reach individual customers easily and maximise revenue according to a
customer's ability to pay. Similarly, Carrie Chau sold her (non-digital) artwork
online through limited editions only, which ensured premium price through
exclusivity. Digital technologies enabled her to identify and reach the small
number of potential customers (target segment) around the world who are
willing and able to pay premium price for her artworks. The music group
Marillion offered fans the opportunity to pre-order its 15th album, and those fans
were formally acknowledged in the album. In addition to music, the children's
book publisher, Flatten Me, sold personalised books with the children's photos as
characters. This was made possible by the digital uploading of photos and small
batch digital printing.
In all these cases, the value propositions were transformed in terms of product
offering (exclusive and personalised), target customer segment (wealthy fans)
and revenue models (premium prices or differentiated prices based on
exclusivity). The value architecture is transformed by using digital technologies
to identify customers (value sensing) who are willing and able to pay premium
prices for exclusivity and personalisation (value capture). The functional
architecture is also transformed, by digitally managing personalised customer
relations and the efficient production and delivery of products to different
customer segments.
3. Conclusion
IT-enabled organizational transformation, the ability for firms to innovate using digital
technologies takes place within a context where environmental disruptions originate from
the increased use of digital technologies at the industry and society levels. From a
multilevel perspective, we can treat a firm’s use of digital technologies as an outcome of a
lower level process, or as an antecedent of a higher level outcome.

In other hand the emerging of IT has change almost business model in nowadays
environment, they use IT for a lot of things and strategy. The challenging stage for every
business is to learn and study more about IT to sustain their innovation and
competitiveness.
References
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